patrick.net

If so, how did they get it?

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Thats a good question, more people should ask more often, about where/how everyone/anyone gets cash into their possession.

You have to ask the right questions, to get to the pertinent answers.

The ones who run businesses are rich and the ones who are in gubmnt are gazillonares with so much ill gotten wealth that their main problem is trying to hide their wealth.

fat32guy, I think you may find the following news report interesting:

http://www.cbc.ca/news/canada/british-columbia/china-real-estate-vancouver-fugitive-1.3655136

From CBC News. “A major Chinese bank has obtained a court order in B.C. freezing the assets of a businessman accused of fleeing China and buying ‘luxury’ Lower Mainland homes after defaulting on a $10 million loan. In an application brought before a B.C. Supreme Court judge last week, lawyers for China CITIC Bank claim Shibiao Yan and his wife bought more than $8 million worth of properties in Surrey and Vancouver over a three-month period beginning in June 2014.”

“The court documents claim Yan, who was president of the Tanyuan Wood Company in Shijiazhuang, China, withdrew RMB 50 million from a line of credit he obtained on behalf of his company. The bank claims the 56-year-old provided a personal guarantee for the money. The loan came due last summer. But the bank claims Yan and his family had already fled to the Vancouver area. Yan could not be reached for comment. He was not represented at the ex parte hearing and none of the allegations against him have been proven in court.”

“Last year, Canada’s anti-money laundering watchdog FINTRAC claimed to have stepped up enforcement activities in Vancouver’s real estate market. A report prepared for the agency suggested the real estate sector was at ’significant risk’ for money laundering.”

“According to the court documents, Yan incorporated a company in B.C. called TYMY Investments in March 2014, and his 36-year-old wife paid $2.5 million for a house in Vancouver a month later. The bank claims Yan applied for the loan in June 2014, but did not reveal that he had a residence or any interests outside of China. He was allegedly given a line of credit in June 2014 and withdrew the entire amount within days. The documents claim Yan bought three homes in Surrey in the next three months, one worth $1 million, one worth $3.1 million and one worth $2.3 million.”

I sometimes wonder if people really watched breaking bad and observed exactly how much cash Walt had near the end....

Then go on to think....so did Mike, so did Gus, so did Todd and all the skinhead guys, so did Hector, and so did a whole bunch of the rest of the top guys as well as Saul.

Think about the very real criminal syndicates and how they have to go about moving their cash around.

All it really comes back to is that real estate agents are slithering unethical dirtbags.

Welcome to globalization!
I'm assuming you mean Chinese nationals when you say "Chinese".
I live in the US so I can't speak to the plight of the Chines buying in the US. I have bought in other countries and they all have their idiosyncrasies, I'm sure the US is no less stringent.

When you buy overseas it can sometimes be difficult if not impossible to obtain a mortgage and when you do, the points penalties begin. When I buy overseas I loose up to 3 points to residents. So a SFR home buyer will pay 3% and my offers of advance start around 6%, even more for commercial property. So if I can avoid it, I like to buy all cash overseas. I'm sure a mortgage broker could shed some light on brokers and underwriters guidelines as well as federal requirements in order to obtain a loan when revenue and residence are off-shore. Another minor point, and this goes to the seller. If you were selling and had matching offers, one from a Chinese buyer with 20% down and an American buyer (20%) down. Who would you sell to? It's not a nationalistic issue, I'm sure the agent would point out to the seller that the Chinese buyer would have a harder time qualifying for a loan. It's as simple as that. So to make a statement, avoid paperwork and be able to compete with vying residents... you have to come in all cash.

Since the 2008 meltdown the requirements to obtaining a foreign loan have become far stricter. Prior to 2008 I didn't have to try too hard to prove I had residency in the UK. Now 90% of all loans are off the table because I now fall under the heading of "Foreign Investor". The loans left on the table stink to high heaven. The UK has now increased the stamp duty (advance tax) on second homes. Another penalty to investors. The IRS requires a FBAR filing for all foreign bank accounts over 10K. There are a lot of government entities looking up your ass all the time. Just saying, buying overseas has massive headaches and choosing the all cash method simplifies the process.

Even cash comes under extreme scrutiny and a lot of paperwork changes hands to prove the cash comes from legitimate sources. I assume NOT from gun running, drug dealing and tax evasion. The three most lucrative ways to make money BTW.

Even though the 'Chinese' are buying cash, you have to look deeper. Why would an investor EVER buy all cash when you can have a bank leverage you into a property? I see the purchases as a hedge against the Yuan. Last time I checked China was still a dictatorship, so anyone with real money would want it out. Bricks and mortar are a good bet and I'm sure the US property market looks fantastic to them. You come across a lot of Chinese cash floating around in university towns. Speaking from experience, buying in downtown Los Angeles (near USC) the amount of asian competing buyers and owners is staggering. A lot of wealthy families opt to buy a condo/apartment for their college going kids to save money on dorm fees and why not? +4 to +7 years of equity... suddenly college became half price.

Cheap crap is shipped from China on container ships burning cheap bunker fuel.

Containers are unloaded in Los Angeles and Seattle, then loaded onto long container trains which zip east to the Walmarts across our land.

Slack-jawed yokels stuff their shopping carts full of cheap Chinese crap.

Cash is wired to Chinese manufacturers.

The Chinese Mafia is alive, well, and all over the damn place.

https://en.wikipedia.org/wiki/Triad_(organized_crime)

A triad is one of many branches of Chinese transnational organized crime organizations based in Hong Kong, Macau, Taiwan and also in countries with significant Chinese populations, such as the United States, Canada, Vietnam, Korea, Japan, Singapore, Philippines, Indonesia, Malaysia, Thailand, the United Kingdom, Belgium, Netherlands, France, Spain, South Africa, Australia and New Zealand.

Fraud or theft in China? Say it ain't so.

dodgerfanjohn says

I sometimes wonder if people really watched breaking bad and observed exactly how much cash Walt had near the end....

Except they had real money, currency. The banks do not actually have what they lend out.

Be mindful the Chinese only buy 150K-200K out of near 6 million total home sales

A lot of that $ are in my city of Irvine

Logan Mohtashami says

out of near 6 million total home sales

6 million total home sales where and in what period of time? Logan, with as much data as you post, we rely on you to bound your stats :-)

BayArea says

6 million total home sales where and in what period of time? Logan

This cycle... roughly 8% of all homes bought have come from foreigners and the Chinese make up roughly really 150K.. some slippage years higher than that.

Irvine is their number 1 place of choice as a % of city sales and with new homes.

Irvine is very unique it's the 7th highest median income city in America and the number 1 educated city in America, full of Asians now.

So far this year from my friends who work in the new home sales area, they said Chinese are still coming and they don't trust everything that is happening in China..

Some real dark stories coming out there.

However, I would say, some of these Chinese have close ties to the government and any capital controls might not matter to them